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For me, there are no dilemmas here at all. The company has made such huge progress from 2017 when it first made the full acquisition of Vametco. Since then the company has modernised the plant, improved training and have a fully motivated team which is now producing record production month on month. We know have Vanchem which is bosting our annual output from 3200 mtV per annum at Vametco by adding an additional 1400 mtV.
The demand for vanadium looks certain to increase and the current increase in vanadium price looks like it could follow a strong upwards curve. The last time we saw a rise in vanadium prices in 2018, we saw a huge increase in the share price. But then we were only producing around 2900 mtV per year.
Given that China is about to complete the building of the largest VRFB in the world which is right in the centre of a city. Safe and huge capacity. This could set a new president for VRFB and demonstrate its ability to generate revenue and give safe long life returns. This size of BESS has the ability to replace gas peaker plants for a fraction of the cost and with zero emmisions and the ability cycle so fast as well as charging and discharging simultaneously.
Bushveld has a target market in Africa for its BESS market which will be under the Bushveld Energy business. But we know have partnerships outside Africa and a new market could still be a partnership in China.
We are looking towards Europe to and the opportunity to complete the acquisition of Enerox through a partnership.
This company has set themselves up to be able to deal with Covid19 and got the plant set up to have a fully optimised plant for the reminder 2020 with a motivated workforce.
All this is in mind with a market cap value which is so low right now, we must be on the cusp of a huge rise.
That for me takes any investor dilemma away.
Cheers, RK
John Meyer- “the US is going to need more vanadium for vanadium redox flow batteries in California....
How the US Section 232 Probe Could Impact the Vanadium Market:
June 3rd, 2020
https://investingnews.com/daily/resource-investing/battery-metals-investing/vanadium-investing/how-section-probe-could-impact-vanadium-market/
John Meyer, SP Angel’s head of research, told INN that there are very few primary vanadium miners, but there are more hopefuls.
“Tariffs might benefit one or two new mines in the US or Canada, but it won’t change the world and these mines are unlikely to compare with primary producers in South Africa and Brazil, such as Glencore (LSE:GLEN), Bushveld Minerals (LSE:BMN) and Largo Resources (TSX:LGO),” he said.
For Meyer, the US is going to need more vanadium for vanadium redox flow batteries in California, but he doesn’t see raising tariffs as helping the supply chain.
The Department of Commerce’s Bureau of Industry and Security will conduct the investigation and will provide the opportunity for public comment through July 20.
This company really does cause me so many dilemmas. Sat on a 50% profit and really tempted to sell up, try make a few £ somewhere else and come back here with some additional cash as I really do believe in the long term value of what BMN are doing in various avenues.
I just can seem to bring myself to hit the sell button for some reason. Vanadium prices sinking over the last year clearly haven't helped but I cant help but feel we have been wayyy oversold to this level.
Mgnt do need to up their PR game given everything the have going on especially around BE, but agree they cant be expected to just put out RNS's left right and centre with air filled updates.
They could pull something out of the bag at any point.....sit tight or play with a bit of fire?
My co's compliance policy of 30 day holding period and delaing once a week tend to steer me away from the playing elsewhere idea!
and don't forget... our Nomad has bought bushy personally now .....
That said, it is positive news and should filter into rising vanadium pricing which is to our benefit
This was a strong update yesterday from SP Angel.
Bushveld Minerals* (BMN LN) 13.75p, Mkt cap £158m – Vanadium prices take off on news of strong demand from China
Bushveld Minerals shares look set to recover on rising ferro-vanadium prices.
Strong demand for steel and particularly structural steel in China is expected to drive demand for ferro-vanadium which is used to strengthen steel.
Better enforcement of the higher-vanadium content regulations introduced in October 2018 should also increase demand particularly for new state-sponsored infrastructure projects.
We expect Beijing to shortly announce a raft of new construction initiatives and projects to restore economic growth
FastmarketsMB trade log shows ferro-vanadium prices indicated at $29-30.50/kg in China
Ferro-vanadium 78% fob China rose $3.5% to $29 - 30.5 /kgV this week (FastmarketsMB)
Vanadium pentoxide 98% rose 8.4% to $6.5 – 7/lb V2O5 this week (FastmarketsMB)
Ferro Vanadium 80% FOB (China) rose to US$29.5/kgV vs US$29.0/kgV (Asia Metals)
Vanadium prices suffered relatively little negative impact through the coronavirus due to the interruption of production of secondary by-product vanadium from the smelting of other concentrates.
Increased use of higher-grade Australian iron ore which carries less vanadium content means that steel producers need to add more ferro-vanadium into their feedstock.
This is expected to drive steel producers to buy more ferro-vanadium in the open market.
Demand for vanadium electrolyte for VRFB systems is also expected to rise.
Bushveld is a significant stakeholder in Invinity Energy Systems PLC which was created through the merger of RedT and Avalon. Invinity shares have more than doubled since the companies were combined.
Bushveld now holds 8.71% in Invinit indicating the value of its stake has risen to £5.8m.
Conclusion: Bushveld Minerals has restarted its mine and processing plant following the 21 day lockdown in South Africa. While this will impact earnings in the first half we expect the company to make a strong recovery from here.
Roscon, is right there is real pressure on vanadium prices.
Cheers RK
I think RK May be referring to the vanadium price. If I got this wrong, please advise.
Roscon